In a bold effort to support American families and boost the economy, President Donald Trump’s administration introduced the “One Big Beautiful Bill Act” (OBBBA) in 2025. Signed into law on July 4th, this sweeping legislation includes a unique stimulus check system designed to support parents and encourage long-term savings for their children.
From an initial $1,000 deposit at birth to the potential for these funds to grow to over $93,000 by retirement age, the program is a game-changer. Here’s how the stimulus check works and what it means for families across the U.S.
How Trump’s Stimulus Check Works: A $1,000 Start That Grows Over Time
At the heart of the One Big Beautiful Bill Act is the creation of the “Trump Accounts”—tax-advantaged savings accounts for each child born in the United States. These accounts are similar to 529 plans or Roth IRAs, but are tailored for newborns.
Under the terms of the law, every child born between January 1, 2025, and December 31, 2028, will receive an initial $1,000 stimulus check deposited directly into a Trump Account. This money is automatically invested in moderate-risk index funds and grows tax-free over time.
The magic of the program lies in compound interest. If parents leave the funds untouched, they can grow significantly. According to the Brookings Institution, a conservative 4% annual return could turn the initial $1,000 into $13,843 by the time the child reaches 18 years old. At a moderate 5% return, the total would rise to $26,283.
For those who invest more aggressively, with a 7% annual return, the account could grow to $93,049 by the time the child reaches retirement age, demonstrating how powerful the stimulus check can be when left to grow over time, according to Futbolete.
This system offers a substantial benefit for families, enabling children to begin their financial futures with a solid foundation.
Parents Can Add More to Boost Savings: Up to $5,000 Per Year
While the $1,000 stimulus check is just the beginning, parents and guardians can contribute additional funds to boost the savings in these accounts. Each year, families can add up to $5,000 to the account, with $3,000 of that amount being tax-deductible annually. This allows parents to maximize the growth of the account and potentially accumulate even more funds for their children’s future.
For example, with a $2,000 annual contribution from parents, a child could have more than $100,000 saved by the time they turn 18. This could be used for college tuition, a down payment on a house, or other major life expenses. The stimulus check is designed to grow into something far greater, providing families with a tool to combat rising education and housing costs.
Long-Term Benefits and Withdrawal Guidelines
The funds in Trump Accounts are not just a one-time bonus—they are a long-term investment. With annual compounding, the money can grow significantly. Withdrawals can be made penalty-free for qualified expenses such as higher education, purchasing a first home, or retirement (once the child reaches the age of 59.5).
However, if funds are used for non-qualified purposes, a 10% penalty applies, similar to the penalties on traditional IRAs. This ensures that the funds are primarily used for long-term financial goals.
The program is currently set to run as a pilot program from 2025 to 2028, with the potential for an extension based on its success. The goal is to address the ongoing challenges of rising household debt (averaging over $100,000) and the country’s declining birth rate, which has fallen below 1.6 children per woman (Futbolete).
Who Is Eligible for the Stimulus Check?
One of the most significant aspects of this program is its inclusivity. The stimulus check applies to all children born in the U.S. during the eligible period, regardless of their parents’ immigration status. This inclusivity provides families of all backgrounds the opportunity to benefit from the program.
Parents must register the child’s birth with the Social Security Administration and inform the IRS through a digital portal or app. Once the registration is complete, the initial $1,000 deposit will be made into the child’s Trump Account within 30 to 60 days.
For children born before 2025, the accounts can be opened retroactively, though they will not receive the $1,000 initial deposit. These children will still benefit from tax advantages and the opportunity for long-term growth, though the early seed money will be missed.
